Health secretary confirms agency staff pay caps

A cap on charges for agency staff in the NHS will be introduced over the next three years, health secretary Jeremy Hunt has confirmed.

The Government aims to save £1 billion in agency costs by capping the amount that companies can charge per shift for all staff, including doctors and non-clinical personnel.

NHS regulators will also set expectations on overall levels of agency spend for each NHS employer.

The plans were initially announced in July, when Hunt claimed staffing agencies were billing “outrageous” amounts, charging up to £1,800 for a nurse shift and £3,500 for a doctor to work a weekend.

The announcement follows reports claiming one locum doctor will earn around £500,000 this year, and that eight locums were paid more than £250,000 last year.

The hourly price cap will affect all types of agency staff, and will be introduced from 23 November, reducing over time until April, when NHS trusts will not be able to pay more than 55% more to agencies than it costs to pay a member of staff for a shift.

Terms and conditions

Earlier this year, the NHS introduced mandatory framework agreements for hiring nursing staff, which set out a national set of terms and conditions under which agencies must operate.

Senior managers appointed by agencies will also be subject to scrutiny, with their remuneration subject to an approval process by the health sector regulator Monitor and the Trust Development Authority.

Figures released last week showed that NHS trusts had overspent by £930 million in the last three months – with agency spending highlighted as one of the biggest factors.

Confirming the new cost-cutting measures, Hunt said: “For too long, staffing agencies have been able to rip off the NHS by charging extortionate hourly rates which cost billions of pounds a year and undermine staff working hard to deliver high-quality care. The tough new controls on spending that we’re putting in place will help the NHS improve continuity of care for patients and invest in the frontline – while putting an end to the days of unscrupulous companies charging up to £3,500 a shift for a doctor.”

Tom Hadley, director of policy at the Recruitment and Employment Confederation, said Hunt was “grossly misrepresenting” the role agencies play in supporting the NHS.

He said: “The overwhelming majority of trusts use frameworks to obtain agency staff, where pay rates are negotiated and set by NHS trusts and central government. The Secretary of State is deliberately presenting extreme, outlier, off-framework instances as if they were the norm.”

Hadley argued that the average band five nurse earns £20 to £25 per hour, while an agency A&E doctor earns around £60 per hour. Agencies then charge a fee of between 10 to 20% to cover the costs of recruiting and vetting the worker. In addition, agencies must carry out training updates and revalidation checks.

He added: “Far from ‘ripping off’ the NHS, recruiters are working all hours to make sure our wards are safely staffed. Even Monitor’s own recent report on NHS trust finances acknowledged that increasing agency spend was due to increasing demand and skills shortages, not escalating or ‘rip off’ rates.”